This week, Saudi Round-Up explores the expanding trade corridors between the Kingdom and key markets like Japan and the UK.
General Business & Economy
Non-Oil Sector Activity Accelerates as PMI Climbs to 56.4 in August
The non-oil private sector continued to show strong expansion in August 2025, supported by increased export orders and robust domestic demand, according to the Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) compiled by S&P Global.
The PMI rose slightly to 56.4 from 56.3 in July, remaining comfortably above the 50 threshold that indicates growth, and outperforming regional peers like the UAE and Kuwait.
FDI Inflows Jump 24% to $31.72bn in 2024
Foreign direct investment (FDI) inflows into Saudi Arabia rose by 24% in 2024, reaching SR119 billion ($31.7 billion), according to official data from the General Authority for Statistics.
This growth came despite a global slowdown in FDI, highlighting Saudi Arabia’s resilience and attractiveness as an investment destination. Manufacturing was the largest recipient of FDI, drawing SR35.12 billion, which accounts for 29% of the total inflows.
Saudi Dominates Healthcare Deals in GCC
Saudi Arabia and the UAE have dominated healthcare investment activities in the Gulf Cooperation Council (GCC) region over the past four years.
According to a JLL report, these two countries were responsible for about 92% of nearly 400 healthcare sector transactions between 2021 and April 2025. Worth noting, the GCC healthcare innovation market is projected to grow from $121.9 billion in 2025 to $170.5 billion by 2030.
Trade & Partnerships
Saudi, UK announce $445m Economic Partnership
The United Kingdom and Saudi Arabia have announced a joint investment deal worth more than £360 million (approximately $484 million) aimed at strengthening economic ties and promoting cross-border investment between the two countries.
The announcement was made at the Great Futures Summit in London, where it was revealed that the investment will create 187 jobs across both nations, including 97 in the UK. This investment focuses on sectors such as clean energy, financial services, and technology.
Japanese Firms Invest $6.3bn in Saudi, 18 set up RHQs
Japanese companies have invested about SR23.6 billion ($6.28 billion) in Saudi Arabia, with 18 firms establishing regional headquarters in the Kingdom, spanning sectors such as petrochemicals, energy, automobiles, electronics, and titanium production.
Bilateral trade between the two nations has grown 37.2% since 2020, totaling over $36 billion, largely driven by Saudi exports of petroleum and petrochemical products.
Saudi to Host Over 1,000 RHQs in a Few Years
Minister of Investment Khalid Al-Falih stated that the number of RHQs is expected to exceed 1,000 within a few years, with an average of 10 to 12 new regional headquarters opening monthly.
The country also hosts over 52,000 registered foreign companies, a significant increase from 5,000 at the launch of Saudi Vision 2030. These companies are projected to invest SR500 billion in Saudi Arabia in the coming years
Real Estate
Office Rents Surge on Tight Supply and Rising Demand
The commercial real estate market in Saudi Arabia is experiencing significant growth, particularly in prime office rents, which climbed 7.3% year on year in the second quarter of 2025 to SR3,630 ($967) per square meter per year in Riyadh.
This rise is driven by tight supply and strong demand, especially in Riyadh and Jeddah, as the Kingdom accelerates its Vision 2030 diversification plan and the Regional Headquarters Program designed to attract multinational companies.
Saudi Mortgage-Backed Securities to Grow in $180bn Home-Loan Market
Saudi has a significant market opportunity for residential mortgage-backed securities (RMBS), driven by a $180 billion home loan portfolio and a strong, well-capitalized banking sector.
The first RMBS deal was launched in August 2025 by the state-owned Saudi Real Estate Refinance Co. (SRC), reflecting the government’s push to increase homeownership to 70% by 2030 under Vision 2030.
Aviation
flynas Secures $134m Murabaha Facility for Fleet Expansion
flynas has secured a $134.4 million (SR504 million) Murabaha financing facility with Saudi Awwal Bank to support its fleet expansion, particularly for new Airbus A320neo aircraft deliveries. The 12-year facility is secured by promissory notes, aircraft mortgages, and related insurance and warranty rights.
This financing is part of flynas’ broader aircraft acquisition program, which includes agreements for 195 narrow-body planes consisting of 159 A320neo and 36 A321neo models.